Lufthansa acquires British airline BMI
It has been announced that German airline Lufthansa has agreed to acquire extra shares in BMI which will take its total shareholding to just over 80%. This will give the company effective control of the budding UK operator and more importantly a number of very expensive and potentially lucrative landing slots at Heathrow airport.
While we are unlikely to see much competition on pricing in the short term due to the weakness in the economy there are hopes that Lufthansa will be able to attack the customer base of British Airways to the benefit of consumers. The last few months has seen major problems in the European airline industry with more and more companies struggling to cope with the reduced turnover and many in serious financial trouble. This acquisition by Lufthansa will not be the last in the sector by any means and we can expect more of the same over the coming months.
Even the reduction in the price of oil has come too late for many European carriers and while we have seen a number of government bailouts this would seem highly unlikely in the future. The collapse of many European economies will very much limit the amount of funding available for specific sector bailouts in the future.
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